How Five Cities Are Driving the Energy Transition in Latin America

From solar roofs to electric public transport, coupled with already high shares of renewables in their mixes, cities in Latin America have demonstrated that they are ready to support the region’s clean energy transition. Several municipal governments in Latin America and the Caribbean already have renewable energy targets and impressive numbers of cities in the region have set net-zero targets.

At the same time, with growing urbanisation and the region’s economic development, there is also a rising demand for energy services and infrastructure needs. Thus, there is an opportunity for cities in the region to adopt renewable energy from the beginning of the urban planning process and in the expansion of existing infrastructure, to build on the vast renewable resources available locally. 

Nicolas Achury Beltran, regional contributor and Lea Ranalder, coordinating REN21’s recently launched Renewables in Cities Global Status Report, explain what five Latin American cities are doing to turn to renewables. 

1. México City: the solar city

Mexico City has developed its ambitious and innovative Solar City (Ciudad Solar) programme to shift to renewable energy, while creating local economic development and jobs. This programme is expected to generate 10,700 jobs in Mexico City and has a budget of around USD 610 million (of which USD 33 million will come from the city’s public fund, the rest form international development banks and other sources). 

The Solar City programme includes the installation of solar water heating systems in businesses and household as well as scaling up solar PV on both public buildings and small and medium enterprises (with a combined capacity of 350 MW). In addition, the initiative plans on training 1,000 technicians for the installation of solar systems, retrofitting public buildings, promoting waste-to energy projects for biogas production and increasing the collection of used cooking oil by 15% per year to ramp up the production of biodiesel.

2. Santiago de Chile: electrifying urban transport with renewables 

Santiago de Chile, a city of roughly 6.8 million inhabitants is one of the leading cities in Latin America driving the energy transition of the region. The city has strongly promoted the integration of electric buses in its public transport system. By mid-2020, over 450 electric buses were circulating in its public transportation system – approximately 6% of the fleet. 

Santiago isn’t stopping there. By 2022 more than 5,000 will have been replaced (mainly by electric buses complemented with Euro VI buses), with the target of having the entire fleet electric by 2035. This commitment is driven by the need to improve outdoor air pollution and reduce emissions.  The city is also making strides to ensure that its transport is powered by renewables. In 2018, a 100 MW solar PV park was commissioned to supply around half the electricity demand of the metro system. 

3. Bogotá – Colombia: following the call to electrify

Bogotá is not far behind Santiago. The city has recognized the importance of improving air quality for its citizens by developing a low-emission public transportation system. Through significant investments in low-carbon technologies, Bogota hopes to become a model in the way Latin American cities can shape the regional energy transition.

Following the city’s objectives to reduce CO2 emissions from the transportation sector, Bogotá has been working to renew the 8,000 buses in its public transport fleet with zero and low-emission buses. During 2021 and 2022 around 900 electric buses and 800 low-emission buses (Euro VI) will be added to the public transport fleet. On top of that, in February 2021 Bogotá procured another 596 electric buses, with a gradual integration starting as of November 2021. This will make Bogotá the Latin American city with one of the largest electric bus fleets.

4. Palmas (Brazil): providing tax incentives for solar PV

Palmas has a goal to generate 100% of its local electricity supply based on solar PV by 2035 and has been working to get its households and companies to be part of this journey. This commitment is driven by the desire to reduce the city’s dependence on the regional grid, reduce energy bills and improve local air quality.  

The city introduced a tax incentive to encourage companies and households to install solar PV and feed surplus generation to the grid.  Users are encouraged to install solar panels in exchange for a discount of up to 80% on two municipal taxes for a period of five years. The city has financed this by launching the project right after a tax increase, foreseeing that a share of municipal revenue would be allocated to this project (learn more about Palmas in the City Snapshot).

5. Recife (Brazil): engaging residents in energy planning

Recife was the first city in the country to formally declare a climate emergency. In response to this, the city committed to becoming carbon neutral by 2050, with an intermediate target of achieving 100% renewable in city-wide operations by 2037. As part of this plan, the city created a municipal forum to formulate climate change and sustainability policies. As part of this, to promote greater citizen/resident participation, the city (in collaboration with the local energy company) holds public meetings where it presents future plans and the results of projects in the region (learn more about Recife in the City Snapshot).

Breaking Barriers to Renewable Energy

Although Latin American cities are paving their way to a cleaner future, some barriers are still to overcome. Upfront costs for renewable energy infrastructure projects are still high and the lack of wider and more flexible financial support (nationally and locally) persists. 

Many of the green investments in cities of the region are made through public-private partnerships, power purchase agreements and dedicated funds. The use of each mechanism really depends on the project’s type and even on the city’s priority areas. However, these instruments are not widely available, they require large public funding and/or financial conditions attractive to private investors. This often leaves behind small cities with fewer resources. 

Cities: The Cornerstone of a Cleaner, Healthier Latin America

Cities across the region have increasingly recognised the many potential benefits of renewable energy use to help create clean, liveable and equitable cities, reduce air pollution and address the effects of climate change.

Yet some city governments may not recognise their critical role in the shift to a renewable-based economy and the opportunities renewables provide. And even those that are willing to move forward run into obstacles, because they do not have the resources and expertise and because some national governments underestimate the value of cities in achieving national decarbonisation goals. There is a need for local and national policy makers to work together: This will require three things: urban and climate strategies to be nationally anchored, policy coherence between the different levels of governments and support for cities in accessing financing schemes. If city and national governments work hand in hand, cities can become cornerstones and allies for a cleaner and healthier Latin America. 

We’re excited to share the Renewables in Cities Global Status Report, REN21’s annual stock-take of the global transition to renewable energy at the city-level. REC 2021 maps ways that cities are advancing energy and climate agendas, demonstrates what’s possible, and presents hundreds of examples of best practices and some case studies – including many from Latin America.

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Article written by Lea Ranalder and Nicolas Achury Beltran.